Argentina Soymeal Exports Slump as Sales Shift to US and Brazil

Argentina’s exports of soybean meal — a key ingredient in animal feed — have slumped following the country’s disastrous soybean harvest. International buyers instead are increasing purchases from Brazil and the US to help make up the shortfall. 

Argentina, the world’s No. 1 exporter of soybean meal and oil, suffered one of the worst droughts in its history, leading to sharply lower production of soybeans, corn, and wheat, as Gro wrote about here. Gro’s Argentina Soybean Yield Forecast Model signaled the drought’s harsh impact on the crop from the outset of the growing season last October.  

Meanwhile, Argentina is being forced to sharply increase imports of soybeans as feedstock for its crushing industry. The jump in imports is expected to exacerbate runaway inflation in the country, where food prices have risen more than fivefold since January 2020, according to Gro’s Agricultural Price Inflation Application.  

The oilseed sector accounts for the majority of Argentina’s total exports, as seen via this Gro display. So far in 2023, Argentina’s soybean meal exports, which flow mainly to Asia and Europe, are running 40% below the five-year average. 

Some of those lost sales are accruing to the US, where export commitments for soybean meal have risen above their historical average since early May. While US soybean ending stocks are the lowest since 2015, ending stocks for soybean meal are at a three-year high. 

For Brazil, soybean meal exports have jumped sharply above historical averages, as seen in this Gro display. Brazil is flush with stocks following the country’s record soybean harvest. 

Argentina’s imports of soybeans — mainly from Brazil and Paraguay — are expected to double this year from last year’s levels, adding to the inflationary pressure that has strained the country for several years. 

Most agricultural commodities are traded in US dollars, which makes imports more expensive when a country’s currency loses value against the dollar, not accounting for price changes of the underlying commodity. The Argentine peso has declined 49.8% against the US dollar over the past 12 months, according to the Gro Currency Browser. Meanwhile, Argentina’s domestic food price inflation is up 445% since January 2020, as shown by Gro’s Agricultural Price Inflation Application. 

Argentina is forecast to import a record 8.3 million tonnes of soybeans this season, according to USDA figures. Argentina’s soybean harvest, at 27 million tonnes, represents the smallest crop in more than two decades, and a near 40% reduction from last year. Imports could increase further if harvest estimates continue to be downgraded.